Uber will increase fares in Melbourne to pay its drivers better

Ride-sharing company Uber is increasing its fares in Melbourne as it tries to address driver dissatisfaction over conditions and pay.

From Friday UberX drivers in Melbourne will charge passengers $1.15 per kilometre, up from $1, combine with 35?? per minute up from 32??.

The base fare of $2 and the booking fee of 55?? will remain unchanged, and Uber will continue to pocket 20 to 25 per cent of the fare.

Under the new rates, an Uber ride that Fairfax Media recently took in Melbourne that cost $19.77 would have cost $21.22.

Similar increases will apply to UberXL and Select rides, and in other Victorian cities.

The rate hike is the latest of a series of tweaks the Silicon Valley giant has made to its drivers' conditions as it faces ongoing complaints about pay and working conditions.

The company's Victorian general manager Lucas Groeneveld said the fare increase was the result of feedback about how challenging driving for the company could be.

"With this in mind, we're making changes to better reflect the time and effort involved in getting riders where they need to go," he said.

Last month Uber introduced fees if passengers kept drivers waiting for longer than 2 minutes, a "no thanks" button so drivers can more easily decline jobs, and a "long trip notification" to warn drivers if a job is going to take longer than 45 minutes.

Rideshare Drivers United, a group which has been agitating for better conditions, said the new features were a result of the FWO investigation and designed to give the impression that drivers were in control of their work and therefore not employees.

The group previously cried foul over fare rate cuts of 15 per cent in May 2015 and again in April 2016, which it said removed driver's ability to make a reasonable hourly rate.